ALC warning on NSW luxury car tax proposal

A NSW Labor proposal to increase stamp duty on vehicles over $100,000, dubbed the 'luxury car tax', has alarmed industry groups, with the Australian Logistics Council (ALC) saying the purchase of commercial and heavy vehicles is a necessity, not a luxury.

Under the proposal, the tax rate would increase from $5 per $100 to $7 per $100 for vehicles with a market value over $100,000, and $9 per $100 over $150,000. It would also apply to boats over $200,000.

The ALC responded with alarm, with CEO Kirk Coningham criticising the move and lack of clarification around the definition of ‘luxury’.

"Trucks are purchased every day to support small business and ensure that groceries, medicines and other essential items are delivered and available for purchase by consumers," Coningham says.

"They are not a luxury item.

"Any new tax on the supply chain will ultimately flow through to consumers – particularly for rural and remote communities that are fundamentally dependent on trucks for their lives and livelihoods.

NSW Farmers was another organisation to voice its disapproval, with vice-president Chris Groves saying: "For most people it [buying a luxury car] is a once in a lifetime experience, whereas for farmers, we buy a luxury car every three to five years. But it is not for luxury, it is for necessity."

In response to the criticism from the latter, NSW Labor leader Michael Daley admits there may be "limited unforeseen consequences" but would not specify the types of vehicles that could be exempt, AAP reports.

"If there is some inherent unfairness in it, of course we are willing to sit down with people and remove that unfairness," Daley says.

"If we have to do something to exempt farmers from that, for working vehicles, we will."